There's been a huge upswing in request for independent medical reviews in California.

A recent surge in independent medical reviews in California has been triggered by that state's new workers compensation reforms. However, analysts say that more time may be needed to determine whether the changes will reduce delays and cut costs.

The Law

A law, signed in September 2012, was meant to lower workers compensation costs for both businesses and insurers. It was also intended to provide better benefits to employees claiming disability pay.

There are provisions in the law that require independent reviews for billing disputes and medical treatment. Those provisions create fees for home health care, language interpretation, and various other services related to workers compensation. The legislation also creates additional fees that were designed to decrease the number of liens filed for services related to health care.

Does It Work?

Analysts say that more time is needed to determine whether the law will live up to its intent to reduce costs for employers and insurers.

"We're starting to see third parties asking for changes, and we just think it's too soon," according to Carlos Rojas, director of risk management at Helpmates Staffing Services in Irvine, California.

"There's a lot that was done in good faith, where you had labor and employers actually come together, and what we're seeing right now is positive. We just need more time before we make more changes," Rojas said.

Analysts say that it will take time to determine if changes to the California law will be successful.

Steve Suchil is the Western region vice president at the American Insurance Association in Sacramento. He says that the law is "playing itself out."

"We're not seeing everything that was promised, but we're seeing a lot of it," Suchil said.

Analysts still see the greatest potential for savings from independent medical review. That's because physicians, as opposed to judges who are more experienced in the law than in human biology and modern medicine, will resolve disputes.

The review process allows for 50 days to produce a resolution. It's meant to expedite the review procedure while either insurers or employers pay $550 for each physician involved in the dispute.

A "Staggering" Rate

According to Mark Sektnan, president of the Association of California Insurance Cos., the review process has been used at a "staggering" rate compared with original estimates.

For example, in April, there were 19,663 requests for independent medical review. In April of 2013, though, there were just 178 requests.

Further, the state workers compensation agency recently said that it was receiving roughly 20,000 requests for independent medical review. That's a five-fold increase over the expectation when the review process was initiated in July of 2013.

"We anticipated a significant number of independent medical review cases, but we didn't anticipate the huge volume of independent medical review cases that we are seeing," Sektnan said.

Staggering, indeed.

"We're asking for all the rules and regulations that were implemented to play out and then (the state can) make adjustments later," said Rojas. "We see (the law) as a huge benefit for the employer community."